Laggard pace of economic growth, downgrade of credit ratings of banks, and towering inflation do not seem to affect the spending using credit cards and debit cards by Indians.
Recent RBI data stated, the credit purchase grew by 28%, best in 4 years, while the debit card purchase grew by 38% compared to 47% the last year.
The consumers purchased Rs. 96,000 crore of goods and services using credit card last year. The debit card or purchase through ATM cards also grew to Rs. 53,000 crore.
The growth is because of growth in number of point of sales (PoS) terminals all across the nation. Also increasing e-commerce is adding to the increasing business.
"The continuous rise in point of sale (PoS) terminals in the country combined with the increased use of online payment is encouraging consumers to go for plastic money," said Shyamal Saxena, general manager, retail banking products, consumer banking, India and South Asia, Standard Chartered Bank.
"Increased credit card spending also reflects high level of confidence among consumers."
Banks are offering more rewards and loyalty schemes with the credit cards, which is expected to further fuel the growth in the plastic money.
However, banks now have tougher screening for issuing cards than before. The total number of cards has decreased with banks cancelling the outstanding cards, and customers choosing single card option over multi-card.
The 50 million new debit cards however added last year, which are now 278 million.